Skyworks: UBS, Davidson Up Targets on iPhone, Galaxy Prospects

By Tiernan Ray

Shares of wireless chip maker Skyworks Solutions (SWKS) are up 16 cents, or 0.6%, at $26.93, helped by some positive remarks from the Street in relation to Apple’s (AAPL) iPad announcement on Wednesday and prospects at customer Samsung Electronics’s (005930KS).

UBS Securities’s Parag Agarwal, who has a Buy rating on Skyworks shares, this morning raised his price target to $33 from $28, writing that recent meetings he attended with management lead him to the conclusion that Skyworks stands to gain chip content in the new model of the iPad, and in an “iPhone 5,” whenever it is introduced.

“While it is generally believed that SWKS should win LTE sockets, we would not be surprised to see incremental content beyond LTE sockets” at Apple, writes Agarwal, referring to the “long term evolution,” or LTE, cellular standard.

Skyworks has also won two thirds of the business for Samsung’s various phones and tablets, including the forthcoming “Galaxy S III,” he believes.

D.A. Davidson’s Aalok Shah, who has a Buy rating on the shares as well, raised his price target to $32 from $27, writing that he, too, believes Skyworks won business in the Galaxy S III. He also thinks the company will be the most adept at selling chips into phones that use Qualcomm’s (QCOM) “MSM8960” chipset. The company should have prominence in both the cellular and WiFi-only versions of the new iPad, he believes.

Shah says recent talk of general problems with chip production in 28-nanometer features at fab partner Taiwan Semiconductor Manufacturing (TSM) are a “point of concern,” but “even if true, the impact on Skyworks will not be substantial.”

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.